Modern Western societies are built on credit, and without a decent credit score, life can be awkward. Having a poor credit history or none at all will make it difficult to get a credit card or other borrowing types.
To get yourself back onto a decent credit rating track, here are three tips to follow:
Start Using A Credit Rebuilder Card
Using these types of cards is one of the best methods of demonstrating that you are a responsible borrower. Credit rebuilder cards are designed specifically for people with poor credit histories, so they often have less stringent acceptance criteria.
You might even be able to receive a card if you have a CCJ (county court judgement) or IVA (individual voluntary arrangement), if you’re a student, or if you are self-employed. Any of these conditions would prevent you from getting a regular credit card.
Credit rebuilder cards usually have lower limits for credit compared to other cards. This reduction in credit makes borrowing easier to manage.
Some rebuilder cards will increase the level of credit they allow you. You should research which ones are best for this feature if you need it. Boosting your credit limit is a sign that you are getting into better repayment habits, and remaining within your credit limit. This behaviour will also start to improve your credit score.
One thing that you should be aware of with credit rebuilder cards is that the interest rate is likely to be comparatively high. Typically you will pay over 30% APR on outstanding amounts, so make sure you clear the card each month before interest kicks in.
Keep Checking Your Credit Score
Taking an interest in our credit rating is something that everyone should do. The credit scoring system is not perfect, and often errors can occur. One small glitch with your rating can mean you end up with a poor score. Before you can rectify this, you need to be aware of what went wrong in the first place.
You can check your credit score through several free services, such as Noddle. This service informs you of your score and provides alerts if anything happens to your credit rating.
You can also get a credit checking service for free with some credit rebuilder cards. Have a look around for those that offer this free service, as it will help you keep a grip on your credit score.
Some regular credit card providers also provide a free credit eligibility check. You can generally do these checks through the provider’s website, and they do not affect your credit score. These checks are handy, as you will get a good idea of whether you should apply for the card or not.
Get Yourself On The Electoral Roll
You may be asking yourself what this has got to do with you being a good borrower or not. Being registered to vote is one of the simplest ways of improving your credit score.
The reason is that lenders generally check the electoral register to verify your address and identification. You can get added to the registry anytime, and don’t have to wait until an election is upcoming. Visit Gov.uk for instructions on how to do this.
Suppose you are not a UK citizen, and unable to vote in UK elections. In this case, you should contact the three major credit agencies (Experian, Equifax, and TransUnion) with proof of your UK residency. They will then have this on file for when a lender checks your details.
Conclusion
Living with a poor credit score, or none at all can be a challenge. Hopefully, these three tips will help you maintain a decent credit rating.